Micro, small and medium-sized enterprises for an inclusive and sustainable recovery
Excellencies,
Ladies and Gentlemen,
It is a pleasure to join you on the occasion on MSME Day to discuss how we can ensure inclusive and sustainable recovery for micro, small and medium enterprises.
It is more than evident seventeen months into the pandemic-induced economic recession, that MSMEs in developing and developed countries have disproportionately been negatively impacted by the crisis.
The lockdowns and social distancing measures imposed after each wave have hit services sectors hosting MSMEs the hardest. Adapting to these negative shocks has not been easy, as MSMEs lack resources, diversified markets, and digital capacity to remain open.
Policy instruments offered by governments in response to the pandemic largely include debt finance, employment support and tax relief. As a result, the majority of MSMEs cannot meaningfully benefit from such support, as they are either informal or cannot absorb more debt.
Since April 2020, UNCTAD has been coordinating the “Global Initiative towards post-Covid-19 resurgence of the micro, small and medium enterprises sector”. The project, jointly implemented by UNCTAD, DESA, ECA, ECE, ECLAC, ESCAP and ESCWA was designed based on the request for assistance for MSMEs from over 50 Member States.
The work under the Initiative has focused its efforts in three key areas:
First, National Entrepreneurship and MSME Policies
UNCTAD is assisting governments developing national entrepreneurship strategies and mainstreaming vulnerable groups through specialized provisions including migrants and refugees in Uganda’s MSME Policy and youth in South Africa’s Entrepreneurship Policy.
Second, capacity building
In the area of skills training, UNCTAD leveraged digital tools to maintain continuity in its Empretec programme to improve resilience and build competencies among MSMEs. In access to finance, UNCTAD developed the Accounting Training Manual for MSMEs to report on sustainability in addition to economic performance. UNCTAD also strengthened capacity of MSMEs to report on core SDG indicators to facilitate their access to impact investors. In the area of regulations, UNCTAD’s Business Facilitation programme implemented digital solutions to simplify and automate company registration with online single windows and contributed to formalization of their activities with great success in Benin and Bhutan even during the pandemic.
Third, raising awareness
UNCTAD widened the knowledge base on the impact of the global pandemic on entrepreneurship and MSMEs giving voice to its large Empretec network and cataloged good practices with UNITAR on digital, green, agri, blue, inclusive and resilient entrepreneurship for inclusive recovery. Furthermore, UNCTAD’s Empretec Women in Business Awards recognized women entrepreneurs’ resilience and contribution to SDGs through circular, sustainable, and inclusive businesses. Winners increased their visibility, accessed further training, government contracts and networks.
In closing, we see that many MSMEs are permanently closed. The crisis pushed even productive MSMEs out of the market.
Moving forward, there is a need to invest more in structural instruments that can build innovative capacity among MSMEs and improve their digital presence.
Governments should also provide an enabling regulatory environment for inclusive businesses and incentivize business practices that are financially, socially, and ecologically sustainable.